##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q/A
 Amendment No. 1
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: March 31, 2006
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 0-02517
 TOREADOR RESOURCES CORPORATION
  Delaware
    
    75-0991164(State or other jurisdiction of incorporation)
    
    (I.R.S. Employer Identification Number)
 4809 Cole Avenue, Suite 108
Dallas, Texas 75205
 Registrants telephone number, including area code: (214) 559-3933
 o þ
  o þ o
 o þ




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##### 



TOREADOR RESOURCES CORPORATION
 TABLE OF CONTENTS
 PageExplanatory
Note about this Report
    
    
    1PART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (unaudited)(1)Consolidated Balance Sheets  March 31, 2006 and December 31, 2005
    
    
    2Consolidated Statements of Operations  for the three months ended
March 31, 2006 and 2005
    
    
    3Consolidated Statements of Cash Flows  for the three months ended
March 31, 2006 and 2005
    
    
    4Notes to Consolidated Financial Statements
    
    
    5Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    17Item 4.
    
    Controls and Procedures
    
    
    27PART II. OTHER INFORMATIONItem 6.
    
    Exhibits
    
    
    30SIGNATURES
    
    
    31Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CAO Pursuant to Section 302Certification of CEO, CFO and CAO Pursuant to Section 906
  
 (1)
    
    As described in Note 1 to the financial statements, the Company restated its financial
statements for the year ended December 31, 2005 and the three months ended March 31, 2006 and 2005.




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TOREADOR RESOURCES CORPORATION
 
 CONSOLIDATED BALANCE SHEETS  (in thousands, except share and per share data)  (Unaudited)
 March 31,
    
    
    December 31,2006
    
    
    2005(restated)
    
    
    (restated)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    38,781
    
    
    $
    53,113Short-term
investments
    
    
    40,000
    
    
    
    40,000Accounts and notes receivable
    
    
    8,202
    
    
    
    8,162Income taxes receivable
    
    
    4,563
    
    
    
    4,453Other
    
    
    2,953
    
    
    
    6,537Total current assets
    
    
    94,499
    
    
    
    112,265Oil and gas properties, net, using
successful efforts method of accounting
    
    
    164,331
    
    
    
    138,158Investments in unconsolidated entities
    
    
    2,362
    
    
    
    2,251Goodwill
    
    
    4,098
    
    
    
    4,195Other assets
    
    
    4,995
    
    
    
    4,945$
    270,285
    
    
    $
    261,814LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    22,862
    
    
    $
    19,248Convertible debenture  related party
    
    
    
    
    
    
    810Income taxes payable
    
    
    1,995
    
    
    
    908Total current liabilities
    
    
    24,857
    
    
    
    20,966Long-term accrued liabilities
    
    
    744
    
    
    
    1,410Long-term debt
    
    
    5,000
    
    
    
    5,000Long-term
asset retirement obligations
    
    
    3,739
    
    
    
    3,630Deferred
income tax liabilities
    
    
    12,378
    
    
    
    12,199Convertible senior notes
    
    
    86,250
    
    
    
    86,250Total liabilities
    
    
    132,968
    
    
    
    129,455Commitments
and contingenciesStockholders equity:Preferred stock, Series A-1, $1.00 par
value, 4,000,000 shares authorized;
liquidation preference of $1,800;
72,000 shares issued
    
    
    72
    
    
    
    72Common stock, $0.15625 par value,
30,000,000 shares
authorized;16,365,041 and 16,142,824
shares issued
    
    
    2,557
    
    
    
    2,522Additional paid-in capital
    
    
    107,465
    
    
    
    108,001Retained earnings
    
    
    33,246
    
    
    
    29,564Accumulated other comprehensive loss
    
    
    (3,489
    )
    
    
    (3,364
    )Deferred
compensation
    
    
    
    
    
    
    (1,902
    )Treasury stock at cost, 721,027 shares
    
    
    (2,534
    )
    
    
    (2,534
    )Total stockholders equity
    
    
    137,317
    
    
    
    132,359$
    270,285
    
    
    $
    261,814
  2




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TOREADOR RESOURCES CORPORATION
 
 CONSOLIDATED STATEMENTS OF OPERATIONS  (in thousands, except per share data)
 Three Months EndedMarch 31,2006
    
    
    2005(restated)
    
    
    (restated)Oil and natural gas sales
    
    $
    9,769
    
    
    $
    6,676Operating costs and expenses:Lease operating
    
    
    2,435
    
    
    
    2,120Exploration expense
    
    
    1,053
    
    
    
    374Depreciation, depletion and amortization
    
    
    1,302
    
    
    
    983General and administrative
    
    
    2,508
    
    
    
    1,804Total operating costs and expenses
    
    
    7,298
    
    
    
    5,281Operating income
    
    
    2,471
    
    
    
    1,395Other income (expense):Equity in earnings of unconsolidated investments
    
    
    96
    
    
    
    89Gain on sale of other assets
    
    
    471
    
    
    
    Foreign currency exchange gain
    
    
    264
    
    
    
    13Interest
income and expense and other, net
    
    
    649
    
    
    
    490Total other income
    
    
    1,480
    
    
    
    592Income before taxes
    
    
    3,951
    
    
    
    1,987Income tax provision
    
    
    803
    
    
    
    62Income from continuing operations
    
    
    3,148
    
    
    
    1,925Income from discontinued operations, net of tax
    
    
    
    
    
    
    10Net income
    
    
    3,148
    
    
    
    1,935Preferred dividends
    
    
    (41
    )
    
    
    (563
    )Income available to common shares
    
    $
    3,107
    
    
    $
    1,372Basic income
available to common shares per shareContinuing operations
    
    $
    0.20
    
    
    $
    0.11Discontinued operations
    
    
    
    
    
    
    $
    0.20
    
    
    $
    0.11Diluted
income available to common shares per shareContinuing operations
    
    $
    0.19
    
    
    $
    0.10Discontinued operations
    
    
    
    
    
    
    $
    0.19
    
    
    $
    0.10Weighted average shares outstanding:Basic
    
    
    15,333
    
    
    
    12,801Diluted
    
    
    16,671
    
    
    
    13,969
  3




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TOREADOR RESOURCES CORPORATION
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS  (in thousands)
 Three Months EndedMarch 31,2006
    
    
    2005(restated)
    
    
    (restated)Cash flows from operating activities:Net income
    
    $
    3,148
    
    
    $
    1,935Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Depreciation and amortization
    
    
    1,302
    
    
    
    983Gain on sale of other assets
    
    
    (471
    )
    
    
    Equity in earnings of unconsolidated investments
    
    
    (96
    )
    
    
    (89
    )Stock based compensation
    
    
    407
    
    
    
    Realized gains on foreign currency transactions
    
    
    (264
    )
    
    
    (13
    )Increase in accounts and notes receivables
    
    
    (150
    )
    
    
    (2,918
    )(Increase) decrease in other current assets
    
    
    3,584
    
    
    
    (1,082
    )Increase in other assets
    
    
    (50
    )
    
    
    (67
    )Increase (decrease) in accounts payable and accrued liabilities
    
    
    2,948
    
    
    
    (3,954
    )Increase (decrease) in income taxes payable
    
    
    1,087
    
    
    
    (734
    )Deferred income taxes
    
    
    179
    
    
    
    2,052Net cash provided by (used in) operating activities
    
    
    11,624
    
    
    
    (3,887
    )Cash flows from investing activities:Expenditures for property and equipment
    
    
    (27,358
    )
    
    
    (8,910
    )Proceeds
from sale of property and equipment
    
    
    1,200
    
    
    
    Investments in unconsolidated subsidiaries
    
    
    (15
    )
    
    
    (324
    )Net cash used in investing activities
    
    
    (26,173
    )
    
    
    (9,234
    )Cash flows from financing activities:Borrowings from long-term debt
    
    
    
    
    
    
    2,000Repayments of long-term debt
    
    
    
    
    
    
    (37
    )Proceeds
from issuance of common stock, net
    
    
    
    
    
    
    32,872Payment of preferred dividends
    
    
    (41
    )
    
    
    (65
    )Tax benefit
of stock option exercises
    
    
    123
    
    
    
    Exercise of
stock options
    
    
    179
    
    
    
    738Net cash provided by financing activities
    
    
    261
    
    
    
    35,508Net increase (decrease) in cash and cash equivalents
    
    
    (14,288
    )
    
    
    22,387Effects of foreign currency translation on cash and cash
equivalents
    
    
    (44
    )
    
    
    4,420Cash and cash equivalents, beginning of period
    
    
    53,113
    
    
    
    4,977Cash and cash equivalents, end of period
    
    $
    38,781
    
    
    $
    31,784
  4




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TOREADOR RESOURCES CORPORATION
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  BASIS OF PRESENTATION
   Restatement
of previously issued financial statement
    Capitalization
of Interest
 Capitalization of Interest Cost
 Insurance Claim Adjustments
  Foreign Currency
 Foreign Currency
Translation
 Depletion,
Depreciation and Amortization (DD&A)
  5




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TOREADOR RESOURCES CORPORATION
CONSOLIDATED BALANCE SHEETS  (in thousands, except per share data)  (UNAUDITED)


March 31,
    
    
    December 31,2006
    
    
    2005As
    
    
    
    
    
    
    AsPreviously
    
    
    As
    
    
    Previously
    
    
    AsReported
    
    
    Restated
    
    
    Reported
    
    
    RestatedASSETSCurrent assets
    
    $
    102,755
    
    
    $
    94,499
    
    
    $
    118,992
    
    
    $
    112,265Oil &
Gas Properties, net using successful efforts
    
    
    152,096
    
    
    
    164,331
    
    
    
    134,035
    
    
    
    138,158Advances to and investments in unconsolidated entities
    
    
    2,362
    
    
    
    2,362
    
    
    
    2,251
    
    
    
    2,251Goodwill
    
    
    2,487
    
    
    
    4,098
    
    
    
    2,487
    
    
    
    4,195Other Assets
    
    
    5,465
    
    
    
    4,995
    
    
    
    5,415
    
    
    
    4,945Total Assets
    
    $
    265,165
    
    
    $
    270,285
    
    
    $
    263,180
    
    
    $
    261,814LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities
    
    $
    24,100
    
    
    $
    24,857
    
    
    $
    24,197
    
    
    $
    20,966Long-term liabilities
    
    
    104,278
    
    
    
    108,111
    
    
    
    104,739
    
    
    
    108,489128,378
    
    
    
    132,968
    
    
    
    128,936
    
    
    
    129,455Stockholders EquityPreferred stock
    
    
    72
    
    
    
    72
    
    
    
    72
    
    
    
    72Common Stock
    
    
    2,557
    
    
    
    2,557
    
    
    
    2,522
    
    
    
    2,522Additional paid-in capital
    
    
    107,607
    
    
    
    107,465
    
    
    
    108,001
    
    
    
    108,001Retained earnings
    
    
    32,589
    
    
    
    33,246
    
    
    
    31,346
    
    
    
    29,564Deferred compensation
    
    
    
    
    
    
    
    
    
    
    (1,902
    )
    
    
    (1,902
    )Accumulated other comprehensive income (loss)
    
    
    (3,504
    )
    
    
    (3,489
    )
    
    
    (3,261
    )
    
    
    (3,364
    )Treasury stock, at cost
    
    
    (2,534
    )
    
    
    (2,534
    )
    
    
    (2,534
    )
    
    
    (2,534
    )Total
Stockholders Equity
    
    
    136,787
    
    
    
    137,317
    
    
    
    134,244
    
    
    
    132,359Total
liabilities and stockholders equity
    
    $
    265,165
    
    
    $
    270,285
    
    
    $
    263,180
    
    
    $
    261,814


TOREADOR RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS  (in thousands, except per share data)  (UNAUDITED)


Three Months Ended March 31,2006
    
    
    2005As
    
    
    
    
    
    
    AsPreviously
    
    
    As
    
    
    Previously
    
    
    AsReported
    
    
    Restated
    
    
    Reported
    
    
    RestatedOil and natural gas sales
    
    
    9,769
    
    
    
    9,769
    
    
    
    6,414
    
    
    
    6,676Operating costs and expenses
    
    
    8,980
    
    
    
    7,298
    
    
    
    5,215
    
    
    
    5,281Operating Income
    
    
    789
    
    
    
    2,471
    
    
    
    1,199
    
    
    
    1,395Other Income (expense), net
    
    
    872
    
    
    
    1,480
    
    
    
    416
    
    
    
    592Income before taxes
    
    
    1,661
    
    
    
    3,951
    
    
    
    1,615
    
    
    
    1,987Income tax provision (benefit)
    
    
    377
    
    
    
    803
    
    
    
    62
    
    
    
    62Income from continuing operations
    
    
    1,284
    
    
    
    3,148
    
    
    
    1,553
    
    
    
    1,925Income from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    10Net Income
    
    
    1,284
    
    
    
    3,148
    
    
    
    1,563
    
    
    
    1,935Preferred dividends
    
    
    (41
    )
    
    
    (41
    )
    
    
    (563
    )
    
    
    (563
    )Income available to common shares
    
    $
    1,243
    
    
    $
    3,107
    
    
    $
    1,000
    
    
    $
    1,372Basic
income available to common shares per shares fromContinuing operations
    
    $
    0.08
    
    
    $
    0.20
    
    
    $
    0.08
    
    
    $
    0.11Discounted operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.08
    
    
    
    0.20
    
    
    $
    0.08
    
    
    $
    0.11Diluted income available to common shares per share fromContinuing operations
    
    $
    0.08
    
    
    $
    0.19
    
    
    $
    0.08
    
    
    $
    0.10Discontinued operation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.08
    
    
    
    0.19
    
    
    $
    0.08
    
    
    $
    0.10Weighted average shares outstanding:Basic
    
    
    15,507
    
    
    
    15,333
    
    
    
    12,801
    
    
    
    12,801Diluted
    
    
    16,338
    
    
    
    16,671
    
    
    
    14,142
    
    
    
    13,969




March 31,2006
    
    
    2005Net cash
provided by (used in):Operating
activities- As
previously reported
    
    
    4,622
    
    
    
    (2,199
    )- As restated
    
    
    11,624
    
    
    
    (3,887
    )Investing
activities- As
previously reported
    
    
    (17,655
    )
    
    
    (6,533
    )- As restated
    
    
    (26,173
    )
    
    
    (9,234
    )Financing
activities- As
previously reported
    
    
    138
    
    
    
    35,119- As restated
    
    
    261
    
    
    
    35,508


New Accounting Pronouncements


Fair Value Measurement
   Accounting for Uncertainty in Income Taxes  An Interpretation of
FASB Statement No. 109,
  Accounting for Conditional Asset Retirement
Obligations, an interpretation of SFAS No. 143
 Exchanges of Nonmonetary Assets, an Amendment of
APB Opinion No. 29, Accounting for Nonmonetary Transactions ( SFAS 153)
 Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements
 Whether Mineral Rights Are Tangible or Intangible Assets, Business Combinations, Goodwill and Other Intangible Assets. Interaction of FASB Statements No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets, and EITF Issue No. 04-2, Whether Mineral Rights Are Tangible
or Intangible Assets. Application of FASB Statement No. 142,
Goodwill and Other Intangible Assets, to Oil- and Gas-Producing Entities
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NOTE 2
 INSURANCE CLAIM ON 2005 BLACK SEA INCIDENTS
  NOTE 3
 STOCK BASED COMPENSATION
  7




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Three MonthsEndedMarch 31, 2005restatedIncome available to common shares, as reported
    
    $
    1,372Basic
earnings available to common shares per share reported
    
    
    0.11Diluted earnings available to common shares per share reported
    
    
    0.10Pro-forma stock-based compensation costs
under the fair value method, net of related
tax
    
    
    26Pro-forma income available to common
shares, under the fair-value method
    
    
    1,346Pro-forma basic earnings available to common shares per share under
the fair-value method
    
    
    0.11Pro-forma diluted earnings available to common shares per share under
the fair-value method
    
    
    0.10
  Options granted in 2005Dividend yield per share (1)
    
    
    Volatility (2)
    
    
    70.9
    %Risk-free interest rate (3)
    
    
    4.0
    %Expected lives (4)
    
    5 years
 
 (1)
    
    Historically, we have not paid dividends on common shares and do not anticipate doing
so during the expected lives of these options.(2)
    
    We estimated volatility based on historic rates of return on our common stock over
periods similar to the expected lives of the related options.(3)
    
    We estimated the risk free rate based on treasury issues with lives similar to the
expected lives of the related options based on quotes available at or near the dates of
grant of the related options.(4)
    
    We estimated expected lives considering, a) the contractual term of the related
options, b) the average age of options exercised near the date of grant of the related
options and c) our expectation of our stock performance during the contractual period.    8




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WEIGHTEDAVERAGE EXERCISESHARES
    
    
    PRICEOutstanding at January 1, 2006
    
    
    858,940
    
    
    $
    5.07Granted
    
    
    
    
    
    
    Exercised
    
    
    (15,350
    )
    
    
    4.34Forfeited
    
    
    
    
    
    
    Outstanding at March 31, 2006
    
    
    843,590
    
    
    
    5.09Exercisable at March 31, 2006
    
    
    788,590
    
    
    
    4.87
   9




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Grant-DateShares
    
    Fair ValueNon-vested at January 1, 2006
    
    
    114,560
    
    
    $
    20.07Shares granted
    
    
    83,075
    
    
    
    30.80Shares vested
    
    
    
    
    
    
    Shares forfeited
    
    
    (300
    )
    
    
    31.42Non-vested at March 31, 2006
    
    
    197,335
    
    
    
    24.59
 10




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NOTE 4  EARNINGS PER COMMON SHARE
  Three Months EndedMarch 31,2006
    
    
    2005(restated)
    
    
    (restated)(in thousands, except per share data)Basic earnings per share:Numerator:Income from continuing operations, net of tax
    
    $
    3,148
    
    
    $
    1,925Income from discontinued operations, net of tax
    
    
    
    
    
    
    10Net income
    
    
    3,148
    
    
    
    1,935Less: dividends on preferred shares
    
    
    41
    
    
    
    563Net income available to common shareholders
    
    $
    3,107
    
    
    $
    1,372Denominator:Common shares outstanding
    
    
    15,333
    
    
    
    12,801Income per share available to common shareholders
    
    $
    0.20
    
    
    $
    0.11Diluted earnings per share:Numerator:Income from continuing operations, net of tax
    
    $
    3,148
    
    
    $
    1,925Income from discontinued operations, net of tax
    
    
    
    
    
    
    10Net income
    
    
    3,148
    
    
    
    1,935Plus: interest on convertible debt
    
    
    6
    
    
    
    14Less: dividends on preferred shares
    
    
    
    
    
    
    563Income available to common shareholders
    
    $
    3,154
    
    
    $
    1,386Denominator:Weighted average common shares outstanding
    
    
    15,333
    
    
    
    12,801Common stock options and warrants
    
    
    725
    
    
    
    948Conversion of preferred shares
    
    
    450
    
    
    
    
    (1)Conversion of 7.85% notes payable
    
    
    
    (2)
    
    
    
    (2)Conversion of 5.0% notes payable
    
    
    
    (3)
    
    
    
    (3)Restricted stock
    
    
    57
    
    
    
    
    (4)Conversion of debenture
    
    
    106
    
    
    
    220Diluted shares outstanding
    
    
    16,671
    
    
    
    13,969Income per share available to common shareholders
    
    $
    0.19
    
    
    $
    0.10
 
 (1)
    
    The conversion of the preferred shares into 450,000 common shares would have been antidulitive at March 31, 2005, therefore
there are no dilutive shares added.(2)
    
    The 7.85 % notes payable were converted to common stock in January 2005.(3)
    
    Conversion of these securities would result in issuance of 2,014,716 common shares that are antidulitive.
The 5% notes payable were issued September 27, 2005 and September 30,
2005.(4)
    
    There were no restricted stock grants outstanding at
March 31, 2005. 11




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NOTE 5  COMPREHENSIVE INCOME
  Three Months EndedMarch 31,2006
    
    
    2005(restated)
    
    
    (restated)Net income
    
    $
    3,148
    
    
    $
    1,935Foreign currency translation adjustment and other
    
    
    (125
    )
    
    
    (5,187
    )Comprehensive income (loss)
    
    $
    3,023
    
    
    $
    (3,252
    )
 NOTE 6  LONG-TERM DEBT
 Convertible Senior Notes due October 1, 2025
   Revolving Line of Credit with Natexis Banques Populaires
  12




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Revolving Line of Credit with Texas Capital Bank, N.A.
  Convertible Subordinated Notes
  Convertible Debenture
  Interest Payments
  13




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##### Table of Contents



NOTE 7  ASSET RETIREMENT OBLIGATIONS
   2006
    
    
    2005Asset retirement obligation January 1
    
    $
    3,630
    
    
    $
    3,291Accretion expense
    
    
    50
    
    
    
    35Property additions
    
    
    11
    
    
    
    205Foreign currency translation adjustment
    
    
    48
    
    
    
    (141
    )Asset retirement obligation at March 31
    
    $
    3,739
    
    
    $
    3,390
 NOTE 8  GEOGRAPHIC OPERATING SEGMENT INFORMATION
   Three Months Ended March 31, 2006(restated)UnitedStates
    
    
    France
    
    
    Turkey
    
    
    Romania
    
    
    Hungary
    
    
    TotalRevenues
    
    $
    1,630
    
    
    $
    7,289
    
    
    $
    850
    
    
    $
    
    
    
    $
    
    
    
    $
    9,769Costs and expenses
    
    
    3,193
    
    
    
    3,122
    
    
    
    561
    
    
    
    
    
    
    
    422
    
    
    
    7,298Operating income
(loss)
    
    $
    (1,563
    )
    
    $
    4,167
    
    
    $
    289
    
    
    $
    
    
    
    $
    (422
    )
    
    $
    2,471
 Three Months Ended March 31, 2005(restated)UnitedStates
    
    
    France
    
    
    Turkey
    
    
    Romania
    
    
    Hungary
    
    
    TotalRevenues
    
    $
    1,783
    
    
    $
    4,291
    
    
    $
    602
    
    
    $
    
    
    
    $
    
    
    
    $
    6,676Costs and expenses
    
    
    2,372
    
    
    
    2,253
    
    
    
    653
    
    
    
    3
    
    
    
    
    
    
    
    5,281Operating income
(loss)
    
    $
    (589
    )
    
    $
    2,038
    
    
    $
    (51
    )
    
    $
    (3
    )
    
    $
    
    
    
    $
    1,395
 Total Assets (1)(restated)UnitedStates
    
    
    France
    
    
    Turkey
    
    
    Romania
    
    
    Hungary
    
    
    TotalMarch 31, 2006
    
    $
    92,540
    
    
    $
    73,561
    
    
    $
    83,305
    
    
    $
    10,830
    
    
    $
    10,049
    
    
    $
    270,285March 31, 2005
    
    $
    46,014
    
    
    $
    61,741
    
    
    $
    22,178
    
    
    $
    1,553
    
    
    $
    
    
    
    $
    131,486
 
 (1)
    
    Each segments assets reflect the effect of intersegment eliminations. 14




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NOTE 9  INCOME TAXES
  Note
10  Subsequent Events
 Insurance
Claims
   Notice of Default
       New
Secured
Revolving Facility
      15




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Nasdaq
Violation
  16




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ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS
  Restatement
of previously issued financial statements
   17




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EXECUTIVE OVERVIEW
    
    
    Operating income of $2.5 million compared with $1.4 million for the three months ended
March 31, 2005,
    
    Production of 176 MBOE,
    
    Cash flows from operating activities of $11.6 million,
    
    Successful testing of the Dogu Ayazli #1 and #2 in South Akcakoca Sub-basin, offshore
Turkey,
    
    The Fauresti-185 well was successfully re-entered and is being completed as a gas
producer. In initial testing, the well flowed approximately 2.0 million cubic feet of gas
per day (MMcfd) with 15 barrels of associated condensate,
    
    The production facility in the Fauresti Field has been completed and tested, and a
pipeline connecting the facility to the national gas distribution system is under
construction and is expected to be completed in the next few weeks.
 LIQUIDITY AND CAPITAL RESOURCES
    18




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Liquidity
   19




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Senior Debt
   Non
Secured Revolving Facility
     Preferred Stock
  Private Placement
 20




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Convertible Senior Notes
  Dividend and Interest Requirements
    Contractual Obligations
  CRITICAL ACCOUNTING POLICIES
  21




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Successful Efforts Method Of Accounting
    Reserve Estimates
  22




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Impairment of Oil and Natural Gas Properties
  Future Development And Abandonment Costs
  23




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Income Taxes
   24




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RESULTS OF OPERATIONS
 COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2006 and 2005
  For the Three Months Ended March 31,2006
    
    
    2005ProductionOil (MBbls):United States
    
    
    14
    
    
    
    15France
    
    
    125
    
    
    
    97Turkey
    
    
    17
    
    
    
    16Total
    
    
    156
    
    
    
    128Gas (MMcf):United States
    
    
    118
    
    
    
    125France
    
    
    
    
    
    
    Turkey
    
    
    
    
    
    
    Total
    
    
    118
    
    
    
    125MBOE:United States
    
    
    34
    
    
    
    36France
    
    
    125
    
    
    
    97Turkey
    
    
    17
    
    
    
    16Total
    
    
    176
    
    
    
    149Average PriceOil ($/Bbl):United States
    
    $
    56.96
    
    
    $
    46.94France
    
    
    58.23
    
    
    
    44.15Turkey
    
    
    51.62
    
    
    
    36.48Total
    
    $
    57.42
    
    
    $
    43.49Gas ($/Mcf):United States
    
    $
    6.12
    
    
    $
    6.17France
    
    
    
    
    
    
    Turkey
    
    
    
    
    
    
    Total
    
    $
    6.12
    
    
    $
    6.17$/BOE:United States
    
    $
    45.29
    
    
    $
    41.15France
    
    
    58.23
    
    
    
    44.15Turkey
    
    
    51.62
    
    
    
    36.48Total
    
    $
    55.11
    
    
    $
    42.59
 25




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Revenue
 Oil and natural gas sales
    Costs and expenses
 Lease operating
  Exploration expense
  Depreciation, depletion and amortization
  General and administrative
  26




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Other income and expense
  Income available to common shareholders
  Other comprehensive income
  Off-balance sheet arrangements
  
 ITEM 4  CONTROLS AND PROCEDURES
   27




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
    
    During the year-end audit several errors were found in spreadsheets. We believe that
the failure of the review process to detect the errors constituted a material weakness.
    
    During the audit of the statutory accounts of our French subsidiary, several audit
adjustments were recorded to the statutory accounts, which affected the tax basis of our
French oil and gas properties. During the preparation of our deferred tax provision, our
French staff failed to consider the statutory audit adjustments in determining the book 
tax basis difference, which resulted in an error in our deferred tax provision for France.
    
    Our review of the system of controls surrounding the information technology system
revealed that 1) several employees could prepare and post entries, leading to a segregation
of duties issue; 2) there was inadequate security over the proper storage of offsite
back-up tapes and the periodic review of back-up tapes to ensure their accuracy; 3)
security logs generated by the system were not periodically reviewed and terminated
employees were not disconnected from the system in a timely manner; and 4) several
authorized users of our accounting system had access to modules that create additional
segregation of duties issues.
  
    
    We did not maintain an effective control environment and our financial and accounting
organization was not adequate to support our financial reporting requirements. The
involvement of corporate personnel in the reporting of foreign transactions and operations
was not sufficient to accurately capture and record such activity and we did not maintain a
sufficient complement of personnel with an appropriate level of accounting knowledge,
experience and training in the application of generally accepted accounting principles
consistent with the level and complexity of our operations.
    
    Our accounting and financial reporting systems and procedures were not sufficiently
designed to ensure consistent or complete application of our accounting policies or to
prepare financial statements in accordance with generally accepted accounting principles.
This includes not only the sufficiency of our review of sensitive calculations,
reconciliations and spreadsheets but also the preparation and processing of financial
accounting information.
  
    
    During the year-end audit several errors were found in
spreadsheets. We believe that the failure of the review process to
detect the errors constituted a material weakness.
    
    Our review of the system of controls surrounding the
information technology system revealed that 1) several employees
could prepare and post entries, leading to a segregation of duties
issue; 2) there was inadequate security over the proper storage
of offsite back-up tapes and the periodic review of back-up tapes to
ensure their accuracy; 3) security logs generated by the system
were not periodically reviewed and terminated employees were not
disconnected from the system in a timely manner; and 4) several
authorized users of our accounting system had access to modules that
create additional segregation of duties issues.
 28




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Changes in Internal Control over Financial Reporting
       
    
    Improving the computerized integrated financial reporting system. This will automate the manual processes that are causing errors in spreadsheets.
 29




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
    
    Hiring additional experienced accounting staff to allow for improved segregation of duties and a more thorough review, by senior financial officers, of the financial statements and underlying supporting documentation.
    
    Providing additional training to our accounting staff and acquiring other accounting resources to improve our ability to report our financial statements in accordance with generally accepted accounting principles.
    
    Formally documenting our accounting policies and procedures.
 
 PART II. OTHER INFORMATION
 
 ITEM 6  EXHIBITS
 ExhibitNumber
    
    Description
    
    Incorporation by Reference10.1
    
    Summary Sheet: 2006 Executive Officer Annual Base Salaries
    
    Incorporated by
reference from
Exhibit 10.1 to the
Current Report on
Form 8-K filed on
February 1, 2006.10.2
    
    Summary Sheet: 2006 Short-Term Incentive Compensation Plan
    
    Incorporated by
reference from
Exhibit 10.2 to the
Current Report on
Form 8-K filed on
February 1, 2006.31.1
    
    Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
    
    Filed Herewith31.2
    
    Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
    
    Filed Herewith31.3
    
    Certification of Chief Accounting Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
    
    Filed Herewith32.1
    
    Certification of Chief Executive Officer, Chief Financial
Officer and Chief Accounting Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
    
    Filed Herewith
 30




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TOREADOR RESOURCES CORPORATION,
RegistrantJanuary 14, 2007
    /s/ G. Thomas Graves IIIG. Thomas Graves IIIPresident and Chief Executive Officer January 14, 2007
    /s/ Douglas W. WeirDouglas W. WeirSenior Vice President and Chief Financial Officer January 14, 2007
    /s/ Charles J. CampiseCharles J. CampiseVice President  Accounting and Chief Accounting
Officer 31